Iofina Share Discussion Threads

[owenga] 27/3/2014 10:15

How does Numis know the company's balance sheet is robust!

[frog1] 27/3/2014 10:06

Despite the fall in SP, I feel happier about IOF today than I did yesterday. This statement from Numis sums it up :-

"We view today's announcement as a positive step in Iofina's evolution, as management focus on maximising returns on both existing and new investments whilst generating positive free-cashflow. Iofina's balance sheet remains robust with sufficient headroom to support the group's operational and capital needs in 2014."

This confirms the feeling I've had about previous management being massively over optimistic with the current CEO and FD struggling to re-introduce normality. The roll out was hugely under estimated as was the cash required. Since they've been there they have had to slow the roll out and cash burn, to get it back to a manageable level.

The operational review buys them some time to get production up and at a consistent level (less down time etc.) and will hopefully make for a more efficient company at year end. Also gives them time to sort out the sales process. I've always been concerned about sales. How they get a customer, manage a big order - they have to commit to delivery and cannot really do this unless they have certainty of production which I'm not sure they have at the moment. With 5-6 plants they should have this so more opportunity to commit and get longer term customers. It's no good just rolling out sites if they are not producing or the product has not been sold.

So I doubt they will need more money now (I hope not anyway), but a long road to recovery imo.

[ridicule] 27/3/2014 10:04

Shonny I shudder to think what you must be saying about Chilean producers.

With your insight, however, why do you not apply for an analyst post with Numis? They pay well and you would be a 'shoe in'. I am sure you could put them on the right track within weeks and get them marching back from their 156p target for IOF, given the incisive details that your posts overflow with.

[che7win] 27/3/2014 09:52

So no cash call.

They are rolling out whilst managing cash flow.

An end of year run rate of 1000MT+ on first 6 plants and two mobile units on top of that.

Probably going into next year on 1200 MT + production.

A couple of mobile units to come and so the company continues to grow.

Water application discounted, nothing in price.

I think today's RNS gives confidence that this is a company managing the growth properly and exciting profits to come.

Let's bed down what we have, get a good Chairman in and he can give direction input.

[shonny] 27/3/2014 09:40

Once again the goalposts have been shifted here with the mug punters being led further up the garden path with more jam tomorrow promises by a BOD whose credibility is at rock bottom. Some people never learn.

[microcline] 27/3/2014 09:40

pabloiom
Monkeys, typewriters, Shakespeare comes to mind.

[karmastuartra] 27/3/2014 09:39

that bloke knows as much about iof as i do turbine engines

[nashwan123] 27/3/2014 09:27

I'd like to know how one on this site was fairly able to predict this announcement and a fall off in the share price in the past weeks. If you are putting money behind shorting do you gamble blind or have inside info? I suspect this was not a pure gamble!
Meanwhile lots of uninformed folk are underwater.

[superg1] 27/3/2014 09:24

In a very basic view.

Price low. Loads cleared out on margins yesterday (unfortunately). Consolidation of cash position, convert the current plants being built into cash generation. Tweak and optimise them, step aside from the disruptive drilling issue re brine disruption. Target high ppm single wells with pods = low opex good production, limited or no disruption, can be moved at any time if disruption appears.


Iodine prices low, which is a change in circs when other decisions were made.

Water

To me with the share price where it is now, it certainly seems like a free bet, with a high likelihood of success, but with an unknown timeline.

Plus the oil drilling going on nearby on levels IOF have that may or may not be reported as commercial in the next few months.

Then on top of all of that, where can the price go now, with 3.5 million shares short, to close at some point.

Their desired dilution to exit now looks like it's confirmed that it is not going to happen, with all the details submitted it's a twist or stick situation for them, with stick, under the circs and share price level, not very attractive imo.

[qprjohn121] 27/3/2014 09:23

owenga 27 Mar'14 - 07:22 - 17555 of 17617 1 1

"I hate to say it but it looks like shinny has been right all along. This will tank today. Is it worth taking my losses now or just hang in long term to see if they can turn it around. Can it go a lot lower?"


Go for it owenga - sell up. But you will have sold at the bottom. Sensible management of cash flow removes the only perceivable risk to this business plan so I for one am delighted to hear that capex is being managed carefully. Captain Kurt is not alone in seeing this as a very positive RNS.

[joestalin] 27/3/2014 09:22

"Production of iodine for both IO#4 and IO#5 is conditional upon final regulatory inspection and approval. The inspection occurred on 14 March 2014, with approval expected shortly"
You would have thought that they would have waited for the decision before they released the RNS - this provides more uncertainty to hold the share price back - but that is no bad thing if you are accumulating.

[festario] 27/3/2014 09:21

My average is still 145p mind!

[festario] 27/3/2014 09:20

Like Investment Guru, I see this as a new baseline to build from. By sheer luck I have been able to add 57k shares today for the cash I got selling 50k on Tuesday. Onward and upward!

[knackers] 27/3/2014 09:15

Orslega - cash call rumours have been seeded by shorters. They are baseless.

So where are we at..? Little more than a 14 week construction/commissioning delay on these innovative new plants (par for the course with such complex builds) and yet a total dismantling of the company's value.

So much for the efficiency of markets - lol!

[hew] 27/3/2014 09:10

Andy,

Agree that the review should be conducted expeditiously, but there is a lot going on - and will be going on. I certainly do not see everything being brought to a standstill during the review. Yes, only a hope, but I see the timescale mentioned as the maximum likely.

Apart from fine tuning the plants it does not preclude designing, planning and obtaining quotations in relation to Mini plants and water facilities - hopefully - and techniques and cost reductions for the large plants. (And the related financial analysis.) All needed prior to actual go-ahead decisions.

[cordone] 27/3/2014 09:07

Thanks Orslega, that's a positive reiteration from Numis without any mention of water so they have a 156p target on Iodine alone. That leaves room for upgrades further down the line this year.

[orslega] 27/3/2014 09:05

No cash call

"Iofina's balance sheet remains robust with sufficient headroom to support the group's operational and capital needs in 2014"

[investmentguru] 27/3/2014 09:03

Looks like a good buying opportunity at these levels.

[orslega] 27/3/2014 09:02

Numis today - Valuation - We reiterate our Buy recommendation and DCF based 156p/share target price.

Iofina has announced the completion of construction of IO#5, and reiterates IO#6 is on-track for completion in 2Q14. Following the commissioning of IO#6, Iofina intends to conduct an operational review in order to establish lessons learnt from plants IO#3-IO#6 and to optimise the design and location of future IO plants. This review process is expected to be complete this Autumn. We understand that the review will focus on optimising current plant design (e.g. tower height and internal configuration) in order to maximise plant returns. We await FY13 results and Q1 production update for further information and clarity on 2014 and 2015 production, and leave our forecasts unchanged.


Construction of IO#5 is complete and regulatory inspection of IO#4 & IO#5 has occurred, where it expects approval shortly. IO#6 remains on schedule to complete in 2Q14. The company's first two mobile units are planned to be ordered in 2014 for deployment in Q4 in order to take advantage of high ppm, low brine volume sites where the units can be economically deployed.


Our forecast iodine production for 2014 assumes production from IO#1-6, and we await the company's Q1 production update before making adjustments to our forecast of 721mt. We recognise that production is likely to be second half weighted and contingent upon successful start-up and operation of IO#4-6. Current forecast production in 2015 includes output from IO#7 in 1Q15 and IO#8-9 from 2H15. We await further detail on operational performance at existing plants, IO#3 to IO#6, before reviewing our 2015 forecasts.


We view today's announcement as a positive step in Iofina's evolution, as management focus on maximising returns on both existing and new investments whilst generating positive free-cashflow. Iofina's balance sheet remains robust with sufficient headroom to support the group's operational and capital needs in 2014.


Valuation - We reiterate our Buy recommendation and DCF based 156p/share target price. We believe that Iofina needs to demonstrate successful execution and operational performance in 2014 in order to increase investor comfort in the economics of future plant roll-out beyond IO#6. Management remain confident in the company's business model and ability to establish Iofina as a significant player in the Iodine market

[andy] 27/3/2014 09:00

hew,

It's the reference to a "six month review" that has made people nervy and uncertain, IMO.

The market doesn't like uncertainty.

At best, I see this RNS as mildly negative.

[calmar1992] 27/3/2014 08:58

Remember in the presentation that IOF said there has never been a company which has produced over 1000mt which hasn't been taken out